Officially the OBR monitors the UK government’s spending plans and performance, and releases forecasts for the economy and public finances twice a year, (alongside the Budget and Spring Statement), which assess whether the government is likely to meet the rules it has set over tax and spending.
Yet the irony in the timing of the questions around its influence is that they follow the chancellor herself giving the forecaster even more independence and authority.
What’s more, she herself appoints, with the consent of the Treasury Select Committee, the three members of the Budget Responsibility Committee, who lead the OBR.
When Labour entered office in 2024 it passed a new law giving it new powers to initiate forecasts, even when the government does not ask it to. This was prompted by the Conservatives’ mini-Budget of September 2022, which promised big tax cuts but did not say how they would be paid for, and spooked financial markets.
At the time I reported that the then-Chancellor Kwasi Kwarteng had brushed away the offer from the OBR of an official forecast, which could either have given some comfort to the markets that the plan had been fully costed, or impeded the Truss administration’s ability to announce those policy changes. The new law ensures this could not happen again.
It also gives the OBR the ability to question government assumptions about spending by departments, which it did not have before, and provides direct access to Treasury data to help them do this.
